How can your business benefit from the increased Annual Investment Allowance?
Did you know that businesses can claim tax allowances (also known as capital allowances) on certain purchases or investments made on business assets?
If you buy an asset, for example a car, tools, machinery or other equipment, for use in your business, you cannot deduct your expenditure on that asset from
your trading profits. However, you may be able to claim a tax allowance (also known as a capital allowance) for that expenditure.The aim is to give tax relief
for the reduction in value of qualifying assets that you buy and own for business use by letting you write off their cost against the taxable income of your
The Annual Investment allowance offers a tremendous opportunity, not only for your businesses to go ahead with investment decisions, but to stimulate growth
in the wider economy, benefiting the UK as a whole. Furthermore, by providing the incentive for businesses to acquire the latest business equipment/plant and
machinery, there is an opportunity to improve your competitiveness.
What has changed?
On 19 March 2014, in his Budget statement, the Chancellor announced that the AIA limit will increase temporarily from £250,000 to £500,000 per annum with effect
from 1 April 2014 for companies and from 6 April 2014 for sole traders/partnerships.
The Chancellor further announced in his Budget Speech on 8th July 2015 that the Annual Investment Allowance will change to £200k with effect from 1st
January 2016. The material contained on these pages is currently being updated to reflect this change.